On January 24, Cui Dongshu stated that the performance of the power battery sector in December was relatively weak, with both export and domestic sales performing moderately. The anticipated battery growth driven by the typical year-end surge in new energy vehicle installations did not materialize, indicating a genuinely poor actual condition. Despite this, the installation rate still saw a significant increase, reflecting that the demand for energy storage did not exceed expectations. The demand for batteries installed in vehicles in December was heavily reliant on a massive surge in heavily subsidized heavy-duty truck batteries. However, fluctuations in the production sector are closely tied to subsidy and tax exemption policies; it is anticipated that pure electric heavy-duty trucks will experience a sharp sequential decline early next year. In December, China's total production of power and other batteries reached 202 GWh, marking a 49% year-on-year increase. From January to December, the cumulative production of power and other batteries in China amounted to 1,756 GWh, representing a cumulative year-on-year growth of 44%.
By 2025, the proportion of power battery production allocated to vehicle installations is expected to stabilize at 44%, with ternary battery installation rates at 41% and lithium iron phosphate installation rates at 45%. However, in December 2025, the proportion of power battery production used for installations dropped to 49%, with ternary batteries at 45% and lithium iron phosphate at 50%, indicating that the prosperity of power battery installations had reached its annual low. Based on calculations using certificate-qualified battery volumes, domestic certifications for new energy vehicles from January to December 2025 reached 14.5 million units, a strong 24% year-on-year increase. This included 8.6 million pure electric passenger vehicles, up 35%, 5.03 million plug-in hybrid passenger vehicles, up 7%, and 780,000 pure electric specialized vehicles and trucks, demonstrating robust production data.
In the fourth quarter of 2025, models with battery energy density above 160 accounted for 10%, a noticeable decline from 13% in 2024, primarily due to the substitution of ternary batteries by lithium iron phosphate, which leads to lower energy density. Conversely, the proportion of products with energy density below 125 fell to just 1% in 2025. The competitive landscape among battery enterprises has solidified, characterized by the relative strength of two major players: CATL and BYD. CATL and BYD are projected to maintain a combined market share of 62% by 2025, leaving over 30% of the market for other enterprises. Companies like CALB, Geely's Yaoning, and Chu Neng Xin Neng performed strongly this year. As BYD has fully transitioned to lithium iron phosphate batteries, the dominance of the top four players in ternary batteries—CATL, CALB, SVOLT, and LG—has become even more pronounced. Recently, strong performance in high-end plug-in hybrids has further bolstered ternary batteries.
The proportion of power batteries installed in vehicles is continuously decreasing. In December, China's total production of power and other batteries was 202 GWh, up 49% year-on-year. From January to December, the cumulative production was 1,756 GWh, up 44% year-on-year. Currently, the share of power battery production used for vehicle installations is consistently falling. In 2021, the installation rate for produced power batteries was 70%; it dropped to 54% in 2022 and 50% in 2023. In 2024, the proportion rose to 50%, but it is expected to hold steady at 44% in 2025, with ternary batteries at 41% and lithium iron phosphate at 45%. By December 2025, this proportion had decreased to 49% (ternary: 45%, lithium iron phosphate: 50%), indicating the installation prosperity index for power batteries had hit its annual low. The rapid growth of the energy storage industry and other sectors, particularly the global energy crisis exacerbated by the Russia-Ukraine conflict, has led to a swift increase in battery demand for non-vehicle applications, causing a noticeable decline in the share allocated to vehicles, although a market downturn early in the year also contributed to this drop. Both the power battery and energy storage battery sectors face significant pressures from overproduction and high inventory levels.
The growth rate of power batteries lagged behind that of complete vehicles in 2021 and 2022. Installation rates for power batteries were relatively low in 2023 and 2024, with battery production growth roughly matching installation growth. In 2025, battery production was high, but installations started from a low base, with the installation rate in December remaining at a relatively high level for the recent period. The demand growth for power battery installations in domestically sold vehicles has been exceptionally strong. Growth was 10% in 2019; installations reached 64 GWh in 2020, with demand growth of 2%; installations hit 155 GWh in 2021, surging 143%; they rose to 295 GWh in 2022, growing 91%; reached 388 GWh in 2023, up 32%; lithium battery installations were 548 GWh in 2024, increasing 41%; and are projected to be 770 GWh in 2025, growing 40%.
Battery demand growth in the passenger vehicle sector remains strong. In 2025, battery demand for pure electric passenger vehicles grew 29%, while demand for plug-in hybrid passenger vehicles grew 17%, indicating sustained robust growth. Battery demand for pure electric trucks also saw a massive increase, reaching 169%. Battery installations in December 2025 grew 35% year-on-year, with strong performance in commercial vehicles, especially pure electric trucks which surged 246%, while plug-in hybrid trucks grew 74%. Analyzing the share of battery installations reveals that the demand structure for power batteries has been changing rapidly in recent years. In 2020, pure electric passenger vehicles ranked first, pure electric buses second, pure electric specialized vehicles third, and plug-in hybrid passenger vehicles fourth. By 2025, pure electric passenger vehicles still hold the top position, plug-in hybrid passenger vehicles have risen to second, pure electric trucks have climbed to third, plug-in hybrid specialized vehicles are fourth, and pure electric buses have fallen to fifth. The pure electric bus market has declined sharply in recent years, while pure electric specialized vehicles have seen rapid growth in battery usage. Currently, battery usage in pure electric and plug-in hybrid passenger vehicles has decreased significantly, whereas usage in heavy-duty trucks has surged dramatically, driven by差异化 trends caused by high subsidy advantages for new energy heavy-duty trucks.
Based on certificate-qualified battery volume calculations, domestic installations for new energy vehicles in 2024 reached 11.68 million units, a strong 42% year-on-year increase. This included 6.35 million pure electric passenger vehicles (up 21%), 4.71 million plug-in hybrid passenger vehicles (up 85%), and 540,000 pure electric specialized vehicles (up 45%), representing favorable production data. For January-December 2025, domestic certifications for new energy vehicles reached 14.5 million units, up 24% year-on-year, including 8.6 million pure electric passenger vehicles (up 35%), 5.03 million plug-in hybrid passenger vehicles (up 7%), and 780,000 pure electric specialized vehicles and trucks, indicating very strong production performance.
The battery supporting market is far from fully competitive. Over the past few years, the competitive landscape of the battery market has not changed significantly. The number of battery supporting enterprises reached 40 in December 2025, which is a normal low level. Because technological progress in the power battery market is relatively slow while scale growth is more pronounced, battery enterprises have experienced strong growth in production and installation volumes. The fundamental competitive structure has not markedly changed; essentially, those who invest more gain larger market share, leading to the continued strong expansion characteristics of major battery players. However, small and medium-sized battery enterprises also have opportunities to achieve growth through technological or other breakthroughs. Therefore, amidst high-speed growth, the battery landscape can be described as relatively stable overall. Nevertheless, the potential for future change in the battery industry is considerable. The trend of automakers producing their own batteries or collaborating with related firms is becoming increasingly evident. Battery enterprises will gradually evolve into core suppliers for vehicle manufacturers.
The battery capacity equipped in various vehicle models is diverging. As battery prices fall, the driving range of electric vehicles continues to increase. Currently, there is a strong demand for premium electric vehicles, while smaller vehicles, akin to upgraded "low-speed electric vehicles," face significant policy pressure, leading to a clear trend towards premiumization. In the second half of 2024, driven by policies like trade-in programs, the small car market recovered, and micro electric vehicles became popular, leading to a decrease in the average installed battery capacity. As the cost advantages of electric vehicles become apparent, the structure of pure electric specialized vehicles is shifting towards heavy-duty trucks, driving a massive increase in required battery capacity. Regarding supply chain issues, automakers are expected to become increasingly powerful, further strengthening their control over battery enterprises and the upstream industrial chain, while also enhancing their command over downstream brand marketing. Under the new energy system, the characteristic of "the vehicle manufacturer being king" will continue to be prominently displayed.
The need for high energy density batteries is decreasing. The main energy density range for batteries in current pure electric vehicles is between 125 and 160 Wh/kg. Notably, in Q4 2025, batteries in the 140-160 Wh/kg range accounted for 36%, an increase of 12 percentage points year-on-year. However, the proportion of models with battery energy density above 160 Wh/kg was 10% in Q4 2025, a clear decline from 13% in 2024, primarily due to the substitution of ternary batteries by lower-energy-density lithium iron phosphate batteries. Meanwhile, the proportion of products with energy density below 125 Wh/kg fell to just 1% in 2025.
The competitive landscape among battery enterprises is characterized by the relative strength of CATL and BYD. CATL's market share decreased to 43.2% in Q4 2025. BYD's share rose from 15% in 2020 to 26.9% in 2023, then declined to 22.6% in Q4 of this year. The market shares of other battery enterprises also showed significant divergence. The agglomeration effect towards the leading enterprises has slowed. From a combined share of 72% for the top two players in 2022, CATL and BYD are expected to maintain a combined share of 62% in 2025, leaving over 30% of the market for other companies. This year, CALB, Geely's Yaoning, and Chu Neng Xin Neng performed strongly. The product differentiation advantage of lithium iron phosphate batteries is evident. BYD is relatively excellent but was in an adjustment period early this year. CATL's share in the lithium iron phosphate battery segment surpassed BYD's in 2024. BYD's performance improved in 2025, with its share increasing by 3 percentage points compared to the same period in 2024. CALB also showed strong performance. Companies like Sunwoda, REPT Battero, SVOLT, and Gotion High-tech demonstrated significant improvement. As BYD has fully transitioned to lithium iron phosphate batteries, the advantage of the top four players in ternary batteries—CATL, CALB, SVOLT, and LG—has become more pronounced. Recently, GAC Aion's subsidiary (referencing potential context) and Eve Energy performed well. LG Energy Solution's statistics improved due to an increased proportion of Tesla's domestic sales in China.
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